Trader Joe’s is a popular American grocery store chain known for its unique, specialty products and affordable prices. As a privately held company, Trader Joe’s stock is not available to purchase on the public stock exchanges. However, there are still a few ways for investors to gain exposure to the success of the Trader Joe’s brand. This article will explore tips for investing in Trader Joe’s indirectly through holding companies, mutual funds, and franchising opportunities. We’ll also look at the growth prospects and financial performance that make Trader Joe’s an attractive investment target.
Invest in Alimentation Couche-Tard to gain exposure to Trader Joe’s
Alimentation Couche-Tard is a Canadian multinational convenience store operator that owns Circle K stores. In 2019, Couche-Tard acquired a 50% stake in a joint venture with European retailer Aldi that holds the license to open and operate Trader Joe’s stores in mainland China. This joint venture represents an opportunity for significant growth, as Trader Joe’s currently has no locations in China. By investing in Couche-Tard, investors can gain exposure to the potentially lucrative Chinese market expansion of the Trader Joe’s brand.
Purchase mutual funds or ETFs with holdings in The Trader Joe’s Company
Since Trader Joe’s is a privately held company, you can’t invest in it directly. However, some mutual funds and ETFs likely have holdings in The Trader Joe’s Company as part of their consumer defensive sector allocation. These could include funds like the Fidelity Select Retailing Portfolio or the Vanguard Consumer Staples ETF. Do your research to find funds with the highest allocation to Trader Joe’s to optimize your indirect exposure.
Invest through a Trader Joe’s franchise opportunity
Trader Joe’s itself does not franchise its stores to entrepreneurs, but there are some franchise opportunities that mimic elements of the Trader Joe’s experience. For example, Associated Wholesale Grocers operates a franchise called Grocers Specialty Company that replicates Trader Joe’s unique approach. Storeformats include Grocery Outlet Bargain Market and Market of Choice. Investing in one of these franchise concepts allows you to capitalize on Trader Joe’s special ambiance.
Consider growth prospects and financial strength
Part of what makes Trader Joe’s an attractive investment target is its continued growth and profitability. The company has expanded to over 530 locations while maintaining excellent financial metrics. For example, Trader Joe’s generates over $1,000 in sales per square foot, putting it near the top of the supermarket industry. High sales paired with low costs and overhead have translated to strong returns that investors hope to capture.
Though you can’t directly invest in Trader Joe’s stock, options like investing in parent companies, mutual funds, and franchises can provide exposure to the grocery chain’s continued success. Evaluating Trader Joe’s growth prospects and financial ratios helps quantify its investment appeal.